DEFENSE LOGISTICS AGENCY

 HEADQUARTERS

 8725 JOHN J. KINGMAN ROAD

 FORT BELVOIR, VIRGINIA 22060-6221

May 21, 2021

MEMORANDUM FOR SUPPLY PROCESS REVIEW COMMITTEE (SPRC)

SUBJECT: Approved Standards Change (ADC) 1400, Air Force 947I Inventory Adjustment 

Transaction Cost Elements (Supply)

The attached change to DoD Enterprise Business Standards, as outlined in the 

attachment, is approved for implementation.

Addressees may direct questions to Mr. Rafael Gonzalez, e-mail: EBSO.Supply@dla.mil. 

Others must contact their designated PRC representative available at 

http://www.dla.mil/HQ/InformationOperations/DLMS/allpoc/

THOMAS A. DELANEY 

Director, Enterprise Business Standards Office

Attachment

As stated 

cc: 

ODASD(Logistics)

OUSD(C) 

OUSD(A&S/DPC)
Attachment, ADC 1400

Page 1

ADC 1400 

Air Force 947I Inventory Adjustment Transaction Cost Elements

1. ORIGINATING SERVICE/AGENCY AND POC INFORMATION:

a. Technical POC: Mr. John “Jack” Dillon, AFMC/A4NL; 937-904-0815; DSN: 674-

0815; or email: john.dillon.2.ctr@us.af.mil

b. Functional POC: Mr. Colquitt “Quitty” Lawrence, HAF/A4LR; 703-692-2348; 

DSN: 222-2348; or email: colquitt.lawrence.civ@mail.mil

2. REFERENCES:

a. Approved Defense Logistics Management Standards (DLMS) Change (ADC) 1224A, 

Addendum to (ADC) 1224, Requirements for Air Force Government Furnished Property (GFP) 

Accountability including Identification of the Contractor Inventory Control Point (CICP), the 

Physical Location of Property, the Authorizing Procurement Instrument Identifier (PIID), 

Disposal Information in the Issue Transaction, and Enhanced Data Content in Inventory-Related 

Transactions.

b. DODM 4140.01, “DOD Supply Chain Materiel Management Procedures”, Volume 5, 

“Delivery of Materiel” 

c. ADC 1225, Revise DLMS 527R Receipt Transaction for Intra-Air Force Government 

Furnished Property (GFP) Accountability to Include Identification of the Contractor Inventory 

Control Point (CICP), Addition of Moving Average Cost (MAC), and Authorization to Use 

Latest Acquisition Cost (LAC) and Acceptance Date

d. ADC 1225A, Approved Addendum to ADC 1225, Accommodate Moving Average 

Cost and Latest Acquisition Cost to Materiel Receipts

3. APPROVED CHANGE(S): Substantial changes from the proposed change are highlighted 

in green.

a. Brief Overview of Change: This is an intra-Air Force-only change that modifies the 

DLMS 947I implementation convention (IC) to allow Air Force contractor inventory control 

points (CICP) to update or report missing cost element data via an inventory adjustment action 

using the Defense Property Accountability System (DPAS). The moving average cost (MAC), 

latest acquisition cost (LAC), and the standard price will be recorded via an inventory adjustment

when Air Force CICP’s previous receipt documentation/document numbers are not available at 

time of receipt to determine proper materiel valuation.

b. Background:

(1) The Federal Accounting Standards Advisory Board guidelines state that 

valuating inventory using the latest acquisition cost (LAC) requires multiplying the last invoice 
Attachment, ADC 1400

Page 2

price paid by the quantity of all like units held, including those units acquired through donation 

or nonmonetary exchange. When LAC valuation is used, the inventory is revalued periodically,

and an allowance account is established for the unrealized holding gains and losses associated 

with ending inventory. The Air Force uses LAC as one of the methods for item valuation. 

(2) The Air Force requires Air Force CICPs to report cost elements at time of 

receipt. However, there is no process today to update or report a missing cost element once the 

item is in storage. As a result, the Air Force is requesting a change to the DLMS 947I Inventory 

Adjustment transaction to allow CICPs to update or report a missing cost element during 

inventory adjustment action. 

(3) LAC is required on the DLMS 947I to allow the Air Force CICPs to record 

the cost associated with an item identified during a physical inventory where the original 

documentation is unavailable. Using the 947I provides a method to account for the asset and 

internally the CICP will document the LAC used to support the deemed cost value.

(a) Upon approval of this change, Air Force CICP’s may record a missing 

or update one of the cost elements during an inventory action: 

1. Moving average cost (MAC), 

2. latest acquisition cost (LAC) or

3. standard price.

(b) The Federal Accounting Standards Advisory Board guidelines define 

the cost elements listed above. The Air Force CICPs will transmit one cost element per 

inventory adjustment transaction. Multiple transactions may be necessary to update more than 

one cost element.

c. Approved Change in Detail:

(1) This proposed change opens the 2/AMT/0700 segment in the DLMS 947I 

Inventory Adjustment transaction to allow Air Force CICPs to update or report missing cost 

elements when documentation is not available to determine proper valuation at time of receipt. 

This is an intra-Air Force requirement.

(2) This change adds three new AMT01 qualifiers as follow: 

(a) CX Actual – Use to update or report missing standard price, 

(b) JJ Cost Basis – Use to update or report missing latest acquisition cost 

(LAC), 

(c) AVE Average – Use to update or report missing moving average cost 

(MAC).
Attachment, ADC 1400

Page 3

(3) Air Force CICP storage activities will use one cost element per inventory 

adjustment transaction. If more than one cost element is required, the Air Force CICP will send 

up to two additional DLMS 947I transaction with the same data, except the additional cost 

element data.

(4) In the DLMS 527R Receipt Transaction, revise the 2/AMT/100 segment note 

to remove the wording related to the moving average cost being identified in that segment. It is 

identified in 2/GF04/060. This is an administrative change and not related to the original 

requirement that added the LAC and MAC in the DLMS 527R Receipt (References 2.c. and 

2.d.).

d. Revisions to Defense Logistics Manuals: Revise the DLMS 947I Inventory

Adjustment and the DLMS 527R Receipt ICs as shown in Enclosure 1.

e. Approved Transaction Flow: No change to the process flow associated with AF 

GFP-A capability initiative shown in Enclosure 2.

4. REASON FOR CHANGE: This change allows Air Force CICPs to transmit cost data in 

inventory adjustments associated with their program to DPAS when previous receipt 

documentation/document numbers are not available.

5. ADVANTAGES AND DISADVANTAGES:

a. Advantages: This change accommodates the Air Force’s requirement for CICPs to 

convey cost data associated with their program to DPAS.

b. Disadvantages: None.

6. ESTIMATED TIMELINE/IMPLEMENTATION TARGET: The Air Force may 

implement this change upon the release of the ADC. The estimated release date is April 1, 2021.

7. ESTIMATED SAVINGS/COST AVOIDANCE ASSOCIATED WITH 

IMPLEMENTATION OF THIS CHANGE: This change allows the Air Force to maintain 

proper item valuation in their respective accounting records. At this point, the Air Force has not 

identified any potential savings.
Attachment, ADC 1400

Page 4

8. IMPACT: 

a. New Changes/Data Elements: Add three new qualifiers as noted in Enclosure 1.

b. Automated Information Systems (AIS): This change will impact the Air Force 

CICP information systems and the Air Force accountable property system of record (APSR), 

which is currently the DPAS.

c. Defense Automatic Addressing System (DAAS): DAAS must update the DLMS 

947I mapping to recognize all three new qualifiers. 

d. Non-DLM Publications: The Air Force identified the following changes to local 

policies: Government Furnished Materiel - Accountability Contractor Inventory Control Point 

Implementation Guide including the Appendix E: DLMS Transaction Guides.

9. PROPOSED DEFENSE LOGISTICS ENTERPRISE STANDARDS CHANGE (PDC) 

1400 RESPONSE/COMMENT RESOLUTION:

Component Response/Comment Disposition

1. U.S. Army None. None.

2. U.S. Navy Concur with no comment. As noted.

3. U.S. Force Concur with comments. As noted.

4. U.S. Marine Corps Concur without comment. As noted.

5. DLA Concur with no comments As noted.

6. DAAS Concur with no comments. As noted.

7. DOD Comptroller Concur with comment.

Comments:

After review of PDC 1400, it is our position that 

references to the DoD FMR should be removed. The 

DoD Volume 4 is under review and being updated, 

therefore to avoid conflicting guidance this PDC should 

reference Federal Accounting Standards Advisory 

Board guidelines. In this case, SFFAS 3 would be the 

most applicable reference as the Air Force is trying to 

use a different valuation method to value historical cost.

As noted.

References to the DoD FMR 

were removed from ADC 

1400 based upon DoD 

Comptroller comments. 
Enclosure 1, ADC 1400

Page 1

Enclosure 1

Revise DLMS 947I Implementation Convention (IC) as shown

Changes are identified by bold italics and deletions by single strikethrough text

# Location DLMS 947I Inventory Adjustment Reason

1. DLMS 

Introductory 

Notes

Add ADC 1400 to DLMS Introductory notes:

- ADC 1400, Air Force 947I Inventory Adjustment Transaction Cost 

Elements

Identifies DLMS 

Changes included in

the IC

2. 2/AMT/0700 Open the 2/AMT/0700 segment:

DLMS Note: 

1. For intra-Air Force use only. Use to provide a cost element when 

previous receipt documentation is not available. Use separate 947I 

transactions when more than one cost element is required.

Open Segment to 

provide cost elements

3. 2/AMT01/0700

Amount 

Qualifier

Open data element and add DLMS Note and add three qualifiers with 

DLMS Notes:

DLMS Note: The following codes are authorized.

CX Actual

DLMS Note: For intra-Air Force use in wholesale receipts of 

property by the Air Force CICP to update the standard price.

JJ Cost Basis

DLMS Note: For intra-Air Force use in wholesale receipts of 

property by the Air Force CICP to the updated latest acquisition cost 

(LAC). 

AVE Average

DLMS Note: For intra-Air Force use in wholesale receipts of 

property by the Air Force CICP to update the moving average cost 

(MAC) cost for the item received. 

Allows the Air Force 

to update or add 

missing cost element 

via the inventory 

adjustment action. 

4. 2/AMT02/0700

Monetary 

Amount

Open data element and add DLMS Note: 

DLMS Note:

1. Express the cost element using the expanded unit price field size 

of 9 digits for dollars and 2 digits for cents. This is expressed as 

“R9.2”. (R is the data element type indicating a decimal numeric 

data element. Pass the decimal point within the transaction; do not 

transmit leading and trailing zeros.

2. Use of the expanded field size is an authorized DLMS migration 

enhancement. See DLMS introductory note 5e.
Enclosure 1, ADC 1400

Page 2

# Location DLMS 527R Receipt Reason

2. DLMS 

Introductory 

Notes

Add ADC 1400 to DLMS Introductory notes:

- ADC 1400, Air Force 947I Inventory Adjustment Transaction Cost 

Elements

Identifies DLMS 

Changes included in

the IC

2/AMT/100 Revise the AMT note: 

DLMS Note: Use as needed in receipt and historical receipt 

transactions for Army Medical Materiel Agreement (AMMA), for 

Commercial Asset Visibility (CAV), and when agreed to by trading 

partners. For intra-Air Force use with receipts and historical receipts to 

provide Moving Average Cost (MAC) and Latest Acquisition Cost 

(LAC). Use of this segment as noted is an authorized DLMS migration 

enhancement. See introductory DLMS note 5g.

Corrects 527R 

documentation error. 

Moving average cost

(MAC) is identified in

2/GF04/060
Enclosure 2, ADC 1400

Page 1

Enclosure 2 GFP-A Inventory Adjustment Transaction Flow

GFP-A Inventory Adjustment Transaction Narrative

Activity Description

1 Update asset management 

position

Contractor performs an inventory adjustment. This could be the 

result of a condition code change, physical inventory, logistics 

reassignment, etc. Contractor transmits inventory adjustment 

Defense Logistics Management Standard (DLMS) 947I, including 

DoDAAC, through DAAS to Air Force Government Furnished 

Property (GFP) Accountable Property System of Record (APSR).

2 Route GFP asset position 

information

DAAS receives DLMS 947I, including DoDAAC, and routes it to 

the Air Force GFP APSR

3 Update GFP asset 

management position

Receive inventory adjustment DLMS 947I that includes DoDAAC 

from DAAS, record transaction and update the GFP balance to 

reflect the inventory adjustment. Air Force GFP APSR provides 

Air Force financial statements updated inventory balances and 

valuation

Revise DLMS 947I (Inventory adjustment)

CICP IMS Transaction Services APSR

Asset financial information

DLMS 947I 

Authorize/Add: Cost Element

Update asset 

management 

position

Route GFM asset 

position 

information

Update GFM asset 

management 

position

Asset position information

DLMS 947I 

Authorize/Add: Cost Element

Inventory needs to

be adjusted

Asset position 

recorded